Best economic growth in 2 years overshadowed in the media by rising gas prices, singing in Spanish and Limbaughs legal settlement.

None of this should come as a surprise. Its actually a trend the
Business & Media Institute has
followed, which has shown the media downplaying strong numbers
while playing up weaker reports.

Despite the negative media coverage, the
economic news was striking. As reported by
Bloomberg: The U.S. economy expanded in the first quarter at an
annual pace of 4.8 percent, the fastest in more than two years, led
by resurgent consumer spending and the biggest jump in business
investment since 2000. Coming after the disappointment of
hurricane-impacted low growth at the end of 2005, this should have
been welcome news.

Unfortunately, the media didnt see it that
way. The worst offender was CBS, which chose not to report the GDP
announcement at all on its April 28 Evening News program, even
though Hannah Storm had warned on the Early Show that day that
soaring energy costs [are] threatening economic growth. But CBS
didnt share with its viewers that in the first quarter this clearly
wasnt the case.

Instead, the Evening News did reports on
how Iranians are buying gold on Tehrans version of a commodities
exchange, a Spanish version of The Star Spangled Banner, a
sixth-grader with Cystic Fibrosis who helped keep a school open in
Philadelphia, and Limbaughs settlement in his Florida drug case.

CBS apparently considered all of those
issues more important to its viewers than economic news. Yet, this
wasnt the case on January 27 when the news wasnt so good. During
an interview with President George W. Bush on the Evening News,
Bob Schieffer specifically addressed the slower-than-expected
fourth-quarter numbers that came out that morning: A report came
out today that shows there was a sharp slowdown at the end of last
year as consumers facing high energy prices cut back on their
spending. The numbers show the GDP was growing in the fourth quarter
at an annual rate of just 1.1 percent.

Gas Prices, Rush and Inflation, Oh My!
But in the present, good economic news
wasnt even as important as the legal issues of a conservative talk
show host. ABC literally postponed its discussion of the strong
economic news on World News Tonight April 28, as Elizabeth Vargas
began the show: Good evening. We'll get to news about the economy
in just a moment, but we begin this evening with breaking news from
south Florida.

When the network moved into a GDP
discussion, a large pail of cold water was thrown on the data.
Reporter Betsy Stark ended the segment with a flood of negatives:
The economy overall remains healthy, but the outlook has become
clouded by rising interest rates, a slowdown in housing, and of
course, rising gas prices. Most economists are forecasting slower
growth for the rest of the year.

From there, Vargas moved the discussion to
oil, and how rising energy prices could derail the current economic
expansion: As you mentioned, rising gas and oil prices perhaps the
biggest risk to the economy. Correspondent David Herley then
enumerated all of the various products that could see higher prices
in the months ahead due to rising fuel costs, including tires,
airfares, diapers, carpets and crayons.

Yet none of those reports told viewers that
inflation was lower in the first quarter than in the fourth quarter,
even as gasoline prices increased by almost 40 cents per gallon an
18-percent jump.

Again, Bloomberg cut through the rhetoric:
The government's personal consumption expenditures index, a measure
of prices tied to consumer spending, rose 2.0 percent after a 2.9
percent rise in the fourth quarter. The index excluding food and
energy, a measure favored by Fed policy makers, rose at a 2.0
percent annual rate after a 2.4 percent rise the previous quarter.

Another measure of inflation in this GDP
report also showed a decline: The GDP price index, a measure of
prices tied to the report rose at a 3.3 percent annual rate in the
first quarter, following a 3.5 percent fourth-quarter gain.

The NBC Nightly News took a different
strategy to downplay the significance of the strong economic report.
Anchor Brian Williams optimistically began: While Americans are
struggling with the price of gasoline, some astounding numbers came
out today on the strength of this U.S. economy. The GDP, the output
of goods and services, grew at its best rate in two and a half
years.

But reporter David Gregory quickly
dismissed the announcements significance: The president appeared
in the Rose Garden today to talk up strong economic growth, 4.8
percent in the first quarter. But with gas prices also surging, he
realized the country isn't celebrating. And thats all the time the
Nightly News devoted to the strongest GDP report in two and a half
years.

Instead, Gregory addressed big oil
companies under fire, calls to abolish FEMA, the ongoing conflict
with Iran, a Spanish version of The Star Spangled Banner, and
massive immigration rallies across the country on Monday.

Three months earlier, when the
fourth-quarter GDP came in weaker than expected, the Nightly News
spent a great deal of time addressing the disappointing data.
Williams began that segment:

Now to the U.S. economy and word today
that business was slow in the last part of last year. It turns out
the gross domestic product for the last three months of 2005 came in
at just 1.1 percent. That's much lower than economists had been
expecting. Is this just a monetary momentary hiccup or a sign of a
real slowdown?

Sure, Its Great Now, But
The print media were no different. The New
York Times chose to downplay the wonderful economic news by first
burying its April 29 GDP
article on the third page of the business section. By contrast,
three months earlier when the fourth-quarter numbers were
disappointing, that news received prominent placement on the cover
of the business section.

After optimistically reporting the good
news in the lead paragraph, reporters Eduardo Porter and Vikas Bajaj
quickly downshifted into gloomy gear in paragraph two: But the
roaring American economy may be turning quieter. Even as the
government report portrayed an economic engine firing on all
cylinders, most economists argue that growth is poised to settle
into a more moderate pace, slowed by high energy prices, rising
interest rates and a softer housing market.

Bajaj and Porter conveniently found a
bearish economist to quote: This is the last big GDP number we are
going to get in this economic cycle, said Ian Shepherdson, chief
United States economist at High Frequency Economics in Valhalla,
N.Y. We are headed toward a slowing path.

They bolstered their case for a slowing
economy by referencing a consumer confidence survey released on
April 28: A majority of households now expect an economic downturn
and bad financial times by the end of this year, said Richard
Curtin, the director of the University of Michigan's Surveys of
Consumers.

The reporters chose not to share a more
upbeat consumer confidence survey released just three days earlier
by the Conference Board. As
reported by United Press International: U.S. consumer
confidence rose in April to its highest level since May 2002, an
industry group said Tuesday. The article cited the opinion of a
Conference Board director: Improving present-day conditions
continue to boost consumers spirits, said Lynn Franco, director of
The Conference Board Consumer Research Center.

Bajaj and Porter also added fears of an
imploding real estate bubble into the mix: A weaker housing market
is expected to weigh on the economy in two ways. Like consumer
confidence, the authors chose not to share a Commerce Department
report on April 26 stating, as
reported by Reuters: Sales of new U.S. homes rose a much
larger-than-expected 13.8 percent in March to a 1.213 million unit
annual rate, the biggest one-month gain since April 1993.

The Times article also ignored an
existing-home sales report on April 25 that came in stronger than
expected, according to
Reuters: The pace of existing home sales in the United States
picked up by 0.3 percent in March, defying expectations for a
slowdown, due to increased buying in some less expensive markets and
in part to warm weather, a trade group said Tuesday.

Washington Post reporters Fred Barbash and
Bill Brubaker delivered their own downbeat GDP
article in April 29s business section. It downplayed good
economic news by prominently displaying the opinions of a highly
partisan politician: House Democratic Leader Nancy Pelosi of
California called the report cold comfort to working Americans
faced with the reality of struggling to pay their bills.

Noel Sheppard is an economist, business owner, and contributing
writer to the Business & Media Institute. He is also contributing editor
for the Media Research Centers NewsBusters.org. Noel welcomes
feedback at
nsheppard@costlogic.com.

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